“There are a large number of issues that tend to make foreign firms wary when coming to India, such as labour laws. With these laws staying rigid, the economy is slowly heading towards ‘informalisation’ of labour, or the gradual reduction of long-term employment contracts,” points out D K Joshi, principal economist, CRISIL. The Doing Business report notes that the costs of firing an employee in India amount to 56 weeks’ wages.

Another potential area for reform is property registration, where India is ranked at 112. It takes, on an average, two months to transfer property and costs 7.7 per cent of India’s gross national income. In China, it takes just half the time and cost.

Despite India’s largely unimpressive overall ranking, there remain some key parameters where India has shown a marked reformist mindset. On credit off take and availability, the country’s rank jumped 26 places to settle at the 36 th spot. Similarly, a pro-reform trade policy has more than halved the time taken to export and import goods to India, leading to an improvement in rank from 142 last year to a healthier 79 this year.

While positive movements are visible on the reforms front, the greatest area of concern for India lies in the mismatch of business environments between different states. The report finds that the time taken to obtain licenses ranges from 159 days in Bhubaneshwar to 522 in Ranchi . The time to register property ranges from 35 days in Hyderabad and Bangalore to 155 in Kolkata.

... contd.